Sustainability Report

A sustainability report is a company's formalised reporting on its material sustainability impacts, risks and opportunities across the environmental, social and governance (ESG) topic areas. Under the Corporate Sustainability Reporting Directive (CSRD) it becomes part of the management report for in-scope companies and must be prepared in accordance with the European Sustainability Reporting Standards (ESRS). It replaces the voluntary or NFRD-based non-financial statement with a uniform, audit-mandated and machine-readable format.

Structure and mandatory components follow the architecture of the ESRS. The starting point is the double materiality assessment (impact and financial materiality), which determines which topics are reported at all. The cross-cutting standards ESRS 1 (general requirements) and ESRS 2 (general disclosures on governance, strategy, management of impacts, risks and opportunities as well as metrics and targets) are always mandatory. These are supplemented by the topical standards identified as material across the environmental (E1–E5), social (S1–S4) and governance (G1) areas with their respective data points. Throughout, the report is organised along the four reporting pillars: governance, strategy, management of impacts/risks/opportunities, and metrics and targets.

In terms of content, a CSRD-compliant sustainability report requires, among other things, a description of the business model and value chain, EU Taxonomy disclosures, a greenhouse gas inventory covering Scope 1, 2 and 3, transition plans, and social and governance-related metrics. The report must be prepared in the European Single Electronic Format (ESEF) with ESRS taxonomy tagging and is subject to external assurance, initially with limited assurance and, in the future, with reasonable assurance. Through the ongoing Omnibus Regulation, the scope and level of detail of these obligations are currently being revised.